Pandora Extends Rally After Stock Offer Sees Strong Demand

Pandora Media Inc. shares rose, headed for their 11th straight day without a loss, after a bigger-than-planned offering of the company’s stock saw heavy demand.

The Internet radio company gained 4.9% in midday trading, extending its recent run into all-time high territory. Wednesday, Pandora and a major stockholder increased the number of combined shares in their recently announced offering by 30% and saw the shares fetch $25 each, according to a statement. The Pandora stock sale priced a day earlier than initially planned because of strong demand for the offering, people familiar with the deal said.

The deal was the latest sign of investors’ recent appetite for consumer-oriented Internet companies. LinkedIn Corp., which has more than doubled this year, sold $1.4 billion worth of stock this month. Facebook Inc. recently rallied above its IPO offer price, and Twitter Inc. drew a flurry of attention to the Internet sector by announcing it’s moving toward its own IPO.

Pandora’s shares priced at a premium to where they had traded before the deal was announced, marking a rare case in which fund managers were willing to forgo the discount they typically demand as a cushion against the risk the stock would fall after the offering.

This year through Friday, follow-on offerings for U.S.-listed companies’ stock have priced at an average 6.8% discount to their latest close before announcing the deal, according to Dealogic.

Another prominent case in which an equity sale priced at a so-called file-to-offer premium was Tesla Motors Inc.’s $355.5 million stock offering in May, which came in the midst of a rally for electric car maker.

Pandora and Crosslink Capital Inc. agreed to sell 18.2 million shares–13 million of that from the company itself–up from an originally planned 14 million. As of Aug. 21, the company had 176.4 million shares outstanding, according to a recent regulatory filing.

Pandora is up 193% year-to-date. The shares haven’t had a daily decline since Sept. 4. On Sept. 16, they were flat. The company went public for $16 a share in June 2011.